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As you begin to look into making financial arrangements, estate planning and wills are the most common options available.
Both are legal documents designed to protect your possessions and aid your loved ones. Because of this, they can seem like one in the same. However, these two financial tools are distinctly different.
It’s easy to be left wondering which is right for you, and if one is better than the other. Hopefully, we can clear some things up. When it comes to the questions of estate planning vs. a will, what exactly sets them apart?
Before we can explain the differences, it’s important to understand each.
What is a Will?
A last will and testament is a legal document used to predetermine where your assets will go after you’ve passed away. By naming beneficiaries to an inventory of your estate, you will have the power to delegate who receives an inheritance, how they will receive it, and who is responsible for carrying out these wishes.
Wills are also a vital part of assigning guardianship to your children after death. If you have a trusted loved one who’s willing, they can be nominated as the guardian of your choice. This ensures your little ones are in the right hands.
Drafting a will also take pressure off of your next-of-kin. Without legal documentation, the only way to allocate someone’s assets is through court. Wills ensures that your loved ones won’t have to face unnecessary costs or engage in bitter disputes. If you neglect to write one, your family will be left to pay.
What is Estate Planning?
Estate planning is a process that includes combining multiple legal documents together into a plan-of-action.
If you’re incapacitated by an injury, illness, or ultimately pass away, an estate plan acts as your voice and communicates your wishes. Estate planning is important because it designates exactly who you want to have to make decisions on your behalf and what will happen with all of your assets.
These decisions include: assigning power of attorney, nominating guardianship, creating a trust, drafting a will, and more.
An estate planning attorney can assist you in building a comprehensive plan. As you grow and your life changes, this plan can be modified to best fit your needs. The most common documents found in estate planning are:
Last Will and Testament
Explanatory Letter
Trust
Guardianship Designation
Power of Attorney
Power of Medical Attorney
So What’s the Difference Between a Will & Estate Planning?
The main difference between drafting a will and estate planning is that an estate plan is much more comprehensive.
Some documents in estate planning outline your wishes during certain scenarios while you're still living, whereas a will is solely for after you pass away.
An estate plan includes a will as one of its documents, but it also lays out items that aren't part of a will. This includes designating a financial power of attorney, healthcare power of attorney, and what your wishes are should you become incapacitated.
If you want to distribute your estate, name your beneficiaries, and nothing more, then a will is a viable option. It’s important to keep in mind that their power is limited. As one-time, simple documents, wills state your posthumous wishes to distribute assets and that’s about it.
However, if you’re looking to have something loved ones can reference in the event you’re gravely injured or pass away, estate planning is necessary. Equipped with a clear, legally binding outline of instructions, your family will know exactly how to carry out your wishes
Drafting a will is a lighter process that can be done with little hassle – especially if you work with an attorney. Estate planning can be more intensive and requires tough decisions, but ultimately leaves you more prepared. No matter which you choose, both guarantee peace of mind about your future.
Start the Planning Process Today!
To learn more about the differences between estate planning vs. wills, or to work with a professional to decide which is better for you, contact us today! We provide will and estate planning services at a flat-fee rate, so you can rest assured you're getting top-notch legal help at an affordable price.